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We are proud to present The Fundcaster – an ETF analysis tool unlike any other! Maybe it’s all been leading up to this…
The first iteration of the Buylyst – an online investment magazine with a transparent portfolio – allowed us to test and hone our investing skills for 5 years and realize – viscerally - some core insights in the process. These are insights that no one had explicitly told us about in business school or in our jobs on Wall Street.
The second iteration of the Buylyst – The Buycaster – allowed us to formalize and scale up those hard-earned, core insights in the form of a “rationality tool” that can analyze 3,500 stocks in the blink of an eye. Then we applied the same know-how to The Bankcaster to cover bank stocks.
Finally, we've evolved into a firm that offers a full suite of Rationality Tools to make sense of equity investing - bottom-up and top-down.
Finally, armed with deep-dive analysis and actionable insights on a combined list of nearly 4,000 stocks in The Buycaster and The Bankcaster, we were able to create The Fundcaster.
The Fundcaster is unlike any other ETF analysis tool out there, primarily because:
- It’s a bottom-up, stock-by-stock, roll up of deep-dive fundamental analysis and actionable insights.
- It’s forward-looking, just like the Buycaster and the Bankcaster. It looks at each stock’s prospects to deliver the stated Desired Return within the NEXT 5 years.
- In doing so, we don’t care much for an ETF’s past returns or risk metrics. Top-down, historical ETF statistics are symptoms, not insights. ETF holdings change regularly, economies change, industries change, governments change…the tool must be forward-looking, not backward-looking.
- It’s quick – it takes The Fundcaster a second to crunch the numbers of all underlying holdings and roll it up to give you deep, actionable insights on any ETF we cover.
- Every ETF in The Fundcaster ends up with a succinct Rationality Rating – which quantifies whether it’s rational to expect the ETF to deliver your desired return compared to the S&P 500’s prospects of doing so. Here’s an example:
We don’t believe that just because an index or ETF has been returning 8 or 9% annualized over the past 30-40 years, it will do so again. The statistical argument is a weak one, and there is simply no guarantee than history will repeat itself. Most people end up punting on ETFs because of this statistical argument, but the danger is waking up decades from now having fallen significantly short if their target return.
An ETF must be analyzed like a portfolio –bottom-up, stock by stock, and rolled up to the portfolio level. Top-down portfolio or ETF risk/return metrics like past performance, historical volatility or Sharpe Ratios, in our experience, do not have much predictive value (if any). So, that’s why we decided to build this tool to analyze ETFs with the necessary rigor that we all deserve. To be honest, our primary motivation was to analyze our portfolio ETF holdings – CIBR and XLV – as deeply as possible, and as quickly as possible, whenever we want.
This first cut of the Fundcaster has about 20 popular ETFs, including our portfolio holdings CIBR and XLV. In the coming weeks, we will expand this list to about 100 popular ETFs, including international ones. For now, here’s a screenshot of some of the list we have in the Fundcaster.